May 1 (Reuters) - Jacob Jacobson agreed to resign as Xerox Corp’s chief executive as part of a settlement of a lawsuit brought by the company’s shareholders that raised questions over Xerox’s agreed deal with Japan’s Fujifilm Holdings Corp, a New York court filing showed on Tuesday.

The proposal, which still needs court approval, also says Jacobson will step down from Xerox’s board, along with six other directors including Chairman Robert Keegan.

The lawsuit had alleged that Jacobson pursued a deal with Fujifilm, even after Xerox’s board advised him to halt negotiations. The company had denied the assertion.

Fujifilm and Xerox struck a $6.1 billion deal in January to combine the U.S. company into their existing joint venture, Fuji Xerox, to gain scale and cut costs as demand for office printing equipment declines.

Xerox could not immediately be reached for comment.

Reporting by Ismail Shakil in Bengaluru and Liana Baker in New
York; Editing by Lisa Shumaker